Difference Between Medicare A and B
Although they both carry the Medicare name, Medicare Part A and Part B are very different in terms of coverage and costs. Medicare Part A covers hospital expenses, hospice, and home health care. Medicare Part B covers outpatient medical care such as doctor visits, x-rays, bloodwork, and routine preventative care. Together, the two parts form Original Medicare.
What is Medicare Part A?
Medicare Part A is sometimes referred to as “hospital insurance.” As the name implies, this is the Medicare plan that covers hospital stays and inpatient treatment. For treatment to be covered by Medicare Part A, it must be deemed medically necessary. This means a doctor has agreed that the treatment is required to prevent or treat a condition or illness.
What is Medicare Part B?
Medicare Part B is known as “medical insurance” because it covers doctor visits and medical care outside the hospital. Like with Medicare Part A, treatment must be determined as medically necessary or preventative to be covered by Medicare Part B.
While Part A is required for some people on disability or those receiving other forms of government aid, Medicare Part B is not mandatory for these people. However, you may incur late enrollment penalties if you don't sign up when you're first.
Coverage differences between Part A and Part B
Original Medicare (also know as traditional Medicare) is divided into two parts designed to cover the majority of your medical expenses. Part A covers stays in hospitals ans skilled nursing facilities, as well as hospice and some home health care services. Medicare Part B covers more regular medical expenses such as doctor visits, lab testing, preventative screenings, and durable medical equipment (DME) such as wheelchairs and medical braces.
What does Medicare Part A cover?
Medicare Part A essentially covers inpatient medical care:
- Home health services, including nursing care, physical therapy, and occupational therapy
- Hospice, which is care aimed at making terminally ill individuals as comfortable as possible after they decide they no longer want to pursue treatment for their illness
- Hospital care, including long-term care facilities and inpatient rehab
- Nursing home care, but only if the beneficiary requires more than custodial care
- Skilled nursing facility care, including meals, supplies, and nurse-administered injections
How much Part A covers for these services depends on which type of facility you stay in, whether you've met the deductible (which resets for each new stay), and how long your stay lasts.
What does Medicare Part B cover?
Medicare Part B covers outpatient medical services:
- Ambulance services, including the ride and any medical care administered
- Doctor’s office visits
- Durable medical equipment, or DME, which is equipment such as wheelchairs, walkers, and bathtub transfer benches
- Bloodwork and lab tests
- Mental health and substance abuse treatment.
- Outpatient surgery, which is surgery where you return home the day of the procedure rather than staying in a hospital or facility to recover
Medicare Part B also covers a variety of preventive care services:
- Tobacco cessation therapy
- Annual wellness visits
- Nutrition therapy
- Flu shots
- Diabetes screenings
- Cancer screenings
- HIV and STD screenings and counseling
Preventive care is care intended to prevent disease, rather than treat disease after it has occurred.
Medicare Part B pays 80% of costs for covered services, leaving beneficiaries to pay the remaining 20% of Part B expenses out of pocket.
What do Part A and Part B not cover?
There are some services and items that Medicare Part A and Part B don’t cover. If you need any of these services, you’ll be responsible for paying the costs yourself unless you have additional insurance or a different Medicare health plan that covers them. Some services Medicare doesn’t cover include the following:
- Cosmetic surgery
- Eye exams for prescription glasses
- Hearing aids and related exams
- Long-term custodial care
- Most dental care
- Most prescription drugs
- Routine foot care
If you require any of these services, you may want to consider switching to a Medicare Advantage Plan that offers additional coverage beyond Original Medicare, which is a common term for Part A and Part B combined. Or, consider adding Part D prescription drug coverage.
Learn more about Original Medicare versus Medicare Advantage.
Cost differences between Part A and Part B
Medicare Part A is free for most Americans age 65 or older, though people who haven't worked or paid Medicare taxes for at least 10 years will pay a large monthly Part A premium. Most people don't get Part B for free whether they've reached their 65th birthday or not, but the cost is much lower and depends on your income.
What does Medicare Part A cost?
Many are eligible for premium-free Part A, which is exactly what it sounds like—qualified Medicare beneficiaries aren’t required to pay a premium for Medicare Part A coverage. To be eligible for Medicare Part A for free, you must be over age 65 and meet one of the following requirements:
- You or your spouse paid Medicare taxes while employed with the government.
- You are eligible for Social Security or Railroad Retirement Board benefits but haven’t started collecting them yet.
- You currently receive retirement benefits from Social Security or the Railroad Retirement Board.
If you are under age 65, you might still be eligible for premium-free benefits if you meet one of two requirements:
- You have received Social Security or Railroad Retirement Board benefits for two years.
- You have End-Stage Renal Disease (ESRD).
If you don’t meet any of the five requirements above, you’ll have to pay a premium for Part A. For 2020, the monthly premium is $458 (up from $437 in 2019).1 Additional costs with Part A include coinsurance in specific situations and a deductible of $1,408 in 2020 (up from $1,364 in 2019) to cover hospital inpatient care.2
What does Medicare Part B cost?
Medicare Part B, on the other hand, requires a monthly premium. The standard premium is $144.60 in 2020 (up from $135.50 in 2019) and increases with income.3 You can choose to have this premium deducted automatically from your Social Security benefits, which can make things easier.
The annual deductible for Part B is $198 in 2020 (up from a deductible of $185 in 2019).4 Once this is paid, you’ll only pay your coinsurance payments, which are 20% of covered expenses.
Some low-income and disabled people may be eligible for help paying Part B premiums through their state's Medicare Savings Program (MSP). Those eligible for free Medicare Part B may qualify for free or lowered deductibles and coinsurance as well.
If you con't qualify for an MSP, consider purchasing a Medicare Supplement (Medigap) plan to help cover the costs of both Parts A and B.
Learn more about Medicare costs.
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